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I'd like to upgrade this to 6.0, but have absolutely no experience with this (the last Windows version I used was Windows 95). Casting around, it looks like the package to download is "Internet Explore 6 Service Pack 1" - is this a correct assumption, and are there any potential pitfalls?
and I heard IE is somehow a semi-integral part of the Windows OS.
End of support for Windows 98 and Windows MeJuly 11, 2006 will bring a close to Extended Support for Windows 98, Windows 98 Second Edition, and Windows Me as part of the Microsoft Lifecycle Policy. Microsoft will retire public and technical support, including security updates, by this date.
End of support for Windows 98, Windows Me, and Windows XP Service Pack 1 [microsoft.com]
The threat is mitigated if you have a firewall installed, either a router or as a software option. You should not be running Windows 98 without one.
Microsoft lifecycle, of course, should be backed up with free licenses for the next-to-expire version. i.e. 98 and ME licensees should get a free license for W2000 on the 26th. Or would that be too much like looking after your loyal customers?